Port­land Ce­ment plans to lay off 1,500 em­ploy­ees, sell land

The firm will close its plant in March 2017 for re­ha­bil­i­ta­tion, with op­er­a­tions ex­pected to con­tinue from April. Re­struc­tur­ing will take 90 days, says EAPCC chair­man Wil­liam Lay

The Star (Kenya) - - News Business - WEITERE MWITA @MwitaMartin

East African Port­land Ce­ment Com­pany plans to re­trench 1,500 out of its 2,000 work­force and sell land worth Sh8 bil­lion to turn around the com­pany, the man­age­ment said yes­ter­day, dis­miss­ing au­di­tor-gen­eral’s re­port that the firm is in­sol­vent.

EAPCC chair­man Wil­liam Lay said the coun­try’s third largest ce­ment maker by mar­ket share is “as­set rich but cash poor”.

“We don’t need a bailout by the gov­ern­ment. In­stead we are pre­sent­ing a so­lu­tion which re­quires min­i­mum in­ter­ven­tion that will turn­around the com­pany and po­si­tion it for growth,” Lay said in Nairobi.

The pub­lic listed com­pany plans to re­struc­ture its op­er­a­tions in three months, in­clud­ing of­fer­ing the 2,000 em­ploy­ees an early re­tire­ment pack­age.

He said the firm has rec­om­mended a struc­tured fi­nanc­ing pro­gramme to ad­dress the short to long-term re­quire­ments, in­clud­ing growth and ex­pan­sion.

“This is a three-pronged fi­nan­cial in­jec­tion pro­gramme which will in- clude debt re­struc­tur­ing and sta­bil­is­ing op­er­a­tions, invit­ing fi­nan­cial in­vestors and ex­tract­ing value from idle as­sets by closely work­ing with the gov­ern­ment,” Lay said.

The board was re­act­ing to a re­cent re­port by the Au­di­tor Gen­eral Ed­ward Ouko who has casted doubt on the firm’s abil­ity to stay afloat with li­a­bil­i­ties amount­ing to Sh4.9 bil­lion, against an as­set value of Sh2.11 bil­lion.

Lay, how­ever, said the com­pany has a Sh5 bil­lion debt, owed to KCB against an as­set (land) worth Sh8 bil­lion.

He said the firm will close its plant in March 2017 for re­ha­bil­i­ta­tion, with op­er­a­tions ex­pected to con­tinue from April. “We need to have our cooler fixed. The re­struc­tur­ing in­clud­ing re­trench­ment will be in the next 90 days,” Lay said.

The com­pany re­ported a 42 per cent drop in full year net profit last Fri­day.

Net profit dropped from Sh7.15 bil­lion in 2015 to Sh4.14 bil­lion in the year ended June 2016, blamed on high op­er­a­tional costs and for­eign ex­change losses.

Rev­enues how­ever in­creased from Sh8.41 bil­lion to Sh8.87 bil­lion, driven by higher ce­ment sale.

/ENOS TECHE

EAPCC di­rec­tor Kung’u Gatabaki with chair­man Bill Lay dur­ing a me­dia brief­ing in Nairobi yes­ter­day

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